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Trade liberalization and capacity utilization: New evidence from the Turkish rubber industry

Author

Listed:
  • Omer Gokcekus

    () (School of Business, North Carolina Central University, Box 19407, Durham, NC 27707, USA)

Abstract

This study empirically tests the hypothesis that trade liberalization increases capacity utilization. It calculates capacity utilization for the Turkish rubber industry by using a production theory framework. More specifically, plant-level capacity utilization levels are calculated using a Generalized Leontief cost function system. Capacity utilization levels were low but improved when the trade regime shifted from a restrictive to a more liberalized one. The size and location of plants were two significant factors which created capacity utilization differences within the industry. However, capacity utilization levels appeared to improve primarily because of trade liberalization.

Suggested Citation

  • Omer Gokcekus, 1998. "Trade liberalization and capacity utilization: New evidence from the Turkish rubber industry," Empirical Economics, Springer, vol. 23(4), pages 561-571.
  • Handle: RePEc:spr:empeco:v:23:y:1998:i:4:p:561-571
    Note: received: January 1996/final version received: March 1997
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    Cited by:

    1. Akpan, Sunday Brownson & Udo, U.J. & Essien, Ubon A., 2011. "Influence of firm related factors and industrial policy regime on technology based capacity utilization in sugar industry in Nigeria," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 3(3), September.
    2. Augustine C. Osigwe & Kenneth Obi, 2015. "Does Capacity Utilization Rate Affect Imports of Raw Materials in Nigeria?," International Journal of Economics and Financial Issues, Econjournals, vol. 5(2), pages 489-492.

    More about this item

    Keywords

    Trade liberalization · capacity utilization · Turkey;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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